Jury award for compensatory damages.When a software solutions provider fails to live up to performance commitments made via a contract for a new software system, a local jury awards the plaintiff in excess of $2 million in compensatory damages.Indemnity Paid: $2,400,000 Defense Cost Paid: $345,000

Why IT Firms Need EO
tech?

The risk of legal assessments
caused by programming or service mistakes makes EO tech
insurance an absolute necessity in the IT business.
Even with IT work that seems less risky, there’s
no outsmarting the consequences of a lawsuit. Practically
any firm or individual that improperly performs services
can cause a client to suffer economic loss.

Commercial General Liability does NOT provide coverage
for programming errors, contract performance disputes
or any other Professional Liability issues. IT consultants
and companies who have General Liability without Professional
Liability (Errors or Omissions) coverage are taking
a serious risk. Even if you’re not at fault, litigation
is time-consuming, costly and potentially disastrous
to your firms reputation. E&O insurance is a cost
effective way to protect your business.

Typically, a general liability policy does not cover
consequential financial loss, and most exclude claims
arising out of professional services. To properly cover
your exposures, you need comprehensive Errors and Omissions
coverage in addition to your existing General Liability
Policy. Optional coverages may include Media and Network
liability.

Network Security Liability

Can be Transmission of
malicious code (i.e. computer virus), security breach
of your network by a hacker, or unauthorized access
to, use of, or tampering with data or systems.

Media Liability

Can be Transmission of
malicious code (i.e. computer virus), security breach
of your network by a hacker, or unauthorized access
to, use of, or tampering with data or systems.

Professional Liability Insurance:
Technology E&O Insurance

What is Technology E&O Insurance?

Technology E&O professional liability
protects your company from claims if your client holds you
responsible for programming errors, software performance,
or the failure of your work to perform as promised in your
contract.

Coverage includes legal defense costs - no matter how baseless
the allegations. E&O insurance will pay for any resulting
judgments against you, including court costs, up to the coverage
limits on your policy.

Coverage extends to both W2 employees and 1099 subcontractors,
and can be worldwide in scope.

When do I need technology E&O insurance?

We generally recommend technology E&O professional
liability insurance coverage be at the foundation of every technology
company’s insurance portfolio. Usually it is wise to purchase
the coverage prior to product or site launch, or when you have
customers.

It can be required by web hosting companies like Exodus or
Globix, as well as by investors, particularly VC’s.

Why do I need technology E&O insurance?

Don’t Be Fooled. Professional Liability
Insurance coverage is not provided by a Commercial General
Liability policy. Commercial General Liability does NOT provide
coverage for programming errors, contract performance disputes
or any other Professional Liability issues. IT consultants
and companies who have General Liability without Professional
Liability (Errors or Omissions) coverage are taking a serious
risk. It’s like a doctor practicing medicine without
Malpractice insurance.

Mistakes Happen. Every company messes up at some point. For
example, you recommend to a client that they run a certain
test of their system, after you did some extensive work on
it. The client takes your advice, the system crashes, and
they are unable to conduct business for a whole week. The
client becomes enraged, calls his attorney, and looks to you
for reimbursement.

You Can’t Be Everywhere. Sometimes you can’t
personally handle every job. E&O coverage insures not
only your mistakes, but also the mistakes of the employees
and Independent Contractors you hire.

Most Importantly: Technology E&O professional liability
insurance might save you from extreme embarrassment, a lost
client, or worst of all, a bad reputation.

IT and technology professional service
providers operate in a perilous business climate - professional
liability insurance will help protect your business

It’s a competitive business environment.
Your service standards and reputation are what set you apart
from the competition. Customers demand more and expect more.
They are not easily pleased and when their expectations are
not met; a dispute may arise. They may seek their remedy in
court, believing your company’s assets are an available
source of relief. IT and technology professional service providers
operate in a perilous business climate characterized by:

Higher service expectations

A societal belief that there’s always a “deep
pocket”, and

Ever escalating awards and settlements

When you are faced with a lawsuit from a customer, win or
lose, the financial ramifications are serious. Every company
wants to mount and fund the best defense possible. But sometimes
even the best efforts aren’t enough and a company may
face costly damages, in addition to legal fees. InsureCast
crafted technology E&O professional liability insurance
coverage for the unique exposures of technology firms. We
specialize in offering liability insurance protection for
technology, IT, Internet, software and bio-tech firms. Please
go to our online CoverageCoach
questionnaire to get a free no obligation Technology E&O
Insurance quote.